History has seen great empires rise and fall. When we think of the rise and fall of empires we tend to think of history, and more so, ancient history. Who for example doesn’t think of the Roman Empire, the Inca’s, Aztec’s, Chinese Dynasties, and more recently the British Commonwealth (see graphic).
But what of geopolitical shifts in our lifetime? Will we for example look back in twenty or thirty years and realize that the events of the last decade marked the beginning of a rise or fall of a super powers, an empire.
Certainly my father who is now in his 70’s would claim decisions taken by Britain in World War I and II contributed to the destruction of the British Empire and Western ascendancy in general. History tells us Britain emerged from World War II as an American dependency. Britain finally paid the loan borrowed from the United States post World War II in 2006.
I, like many, am of the view that we may well have seen the beginnings of the fall of the United States, as a super power, an omnipower, a modern Empire. I would argue that the wars waged in Iraq and Afghanistan were/are necessary – however, the major participant to the NATO allies has largely struggled to fulfill its objectives. At the same time China is emerging as a power beyond the control of the United States on a number of metrics.
When the United States looks at China and Russia, nations with two of the world’s largest trade surpluses – it must look at them through the lens of debt. In fact a country with a huge debt. Russia’s 2007 current account surplus is $465 billion and China’s is $363 billion. In contrast, the US current account deficit is $987 billion - an amount larger that the total deficits of all other countries in the world combined.
So far, United States has been able to support such deficits partly because the US dollar is the world reserve currency – something also a risk to the Euro if oil is priced in Euros instead of US dollars. If the US dollar loses its reserve currency role, foreign capital for US trade and budget deficits will quickly diminish, leading invariably to reduce living standards.
United States’ unfunded liabilities is totaling $53 trillion – perhaps a credit risk according to some, and certainly a growing reliance on foreign capital to finance its consumption, its wars, and the daily operations of its government.
In August 2011, The American Congress and President Barack Obama come to an agreement on a deal to raise the country’s Congressionally-imposed debt ceiling, the legal limit on government borrowing to pay its debts, but the bitter battle that brought the country to the edge of default has had significant impact on American politics, its standing in the world and even how Americans perceive themselves.
For example, Americans’ perception of how Congress handled the debt ceiling crisis, “most agree that all of the players were more interested in gaining an upper hand” than the good of the country.
American capitalists have moved offshore so many United States manufacturing, engineering, and research jobs that US imports now exceed United States industrial production. American dependency on imported manufactured goods, advanced technology goods, and energy is shocking.
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